Thursday, February 09, 2006

Analytical Assessment Of The Speech Made By The Minister Of Finance To Parliament, While Presenting Annual Budget Of 2006

Analytical Assessment of the Speech made by the Minister of Finance to Parliament, while presenting Annual budget of 2006.

1. In a country where 40% of its tax revenues is mismanaged or not collected due to various reasons that will be explained in subsequent paras, I was expecting from H.E.The Minister of Finance to present to the newly elected parliamentarians an analytical executive summary highlighting how the ministry executed its annual operations for the year 2005 (i.e. a budget of $ 24 million) and whether the resources available to the ministry in year 2006 ( $ 28 million) is adequate or otherwise in implementing the plans envisaged in year 2006. However, the Minister merely explained changes to revenue estimates of 2006 compared to 2005. He did not even spell out what % of the estimates made in 2005 has been achieved. The assumptions on which the revenue increases/decreases are based in year 2006 has not been mentioned in the speech. The Minister tried his best to water-down the role of the Parliament in overseeing and scrutinizing the Plans and the Execution of all the operations of the Executive Branch in which he represent as Minister of Finance. He tried his best to convince the MPS that they are merely representatives of their clans and thus do not represent the interest of the whole nation like the President of the State. This was rather misleading and provocative statement which should have been omitted from the speech, since it does not reconcile with the actual responsibilities of the Parliament as stipulated in the Constitution. I do share an optimistic view with some other citizens that the revenue of Somaliland can easily be raised to over $ 50 million, if the government decides to invest $2 million on a program that can reduce evasion of taxes and introduces harsh punishment to all detected financial corruption transactions.

2. In my modest assessment the Minister did not disclose major parts of his responsibilities as discussed below:-1. The minister should report upon whether his ministry operates in all the territories of Somaliland and should explain the factors that may have denied them to operate. In year 2002 I came to learn that the Ministry was functional in Burao city only and did not have any representation in other towns of Togdheer Region. In Sanaag Region, the sub-accountant office was operational; however other Departments of the Ministry were not present. In Sool Region there was no representation of the Ministry even in CAINABO which has a branch of the Central Bank. We need to be up-dated on this matter. The Ministry is fully functional in all the western regions of the country viz Berbera, Northern and Awdal Regions ;2. Most of the Departments of the Ministry i.e Accountant General, Comptroller of Customs & Excise, Internal Revenue Department, Budget Control Department and Department of Personnel & Department of Administration, need an urgent capacity building program in order to make them shoulder their respective responsibilities efficiently and effectively;

3. Assessment report on the adequacy or in-adequacy of the financial rules and regulation and the accounting procedures of the public sector and other financial policies of the country. There is a dire need to translate all financial sector laws to Somali, since 75% of SLD civil servants are not proficient in English language;

4. Government policy that ignores all initiatives of detecting and punishing corruption acts, although such acts are common and encourages legalization of corruption in all its forms;

5. Prevailing high state of inefficiency, irresponsibility, indiscipline and corruption of Somaliland civil servants in general and in particular those of the Ministry of Finance and Berbera Port, who have accumulated wealth in less than 5 years. Criteria of recruitment, promotion and system of rewarding staff & management is either guided by nepotism or favoritism practiced by the most influential Officials of State bodies and not on the basis of meritology;

6. Non-compliance to the financial rules and regulations and other financial policies including procurement procedures of the state by government ministries and in particular by the Ministry of Finance since it failed to submit audited final accounts of the government for a long period and did not bring to account some collected revenues in compliance to the financial rules of the country;

7. Report on the management and maintenance of public assets and there where-abouts and naming the custodians accountable for their safety i.e fixed and moveable assets including assets ordered from abroad, but not yet received or in the hands of private citizens legally or illegally;

8. Debts owed by the government to both public sector and private sector agencies;

9. Evasion of taxes due to lack of tax paying culture which requires an aggressive campaign of convincing our citizens how taxes finance vital public services rendered to them and translating the tax laws to Somali and making available to all potential tax payers. Explaining why some SLD citizens prefer to import goods from Bossasso or Djibouti instead of Berbera Port;

10. Clarify whether estimated sales tax collectable by the Ministry of Finance on behalf of the local governments who have an entry point of goods and services from a foreign country is included in the total sum of estimated revenue of $ 28 million or otherwise;1

1. The question of low paying the civil servants of the government much below living income in the country is counter productive and breeds corruption activities;

12. Training programs, office space, office equipments and supplementary amenities are in most cases either in adequate or poorly maintained;

3. Relations between the Ministry of Finance and the Central Bank and Performance of the Central Bank as the Treasurer of the government;

14. Assessment of the capacity of the Central Bank and whether its capable of monitoring the operations of Commercial Banking, incase some investors submit a request LICENSING application;

15. In the area of government expenditure I can detail numerous grey areas where the ministry faces serious constraints in discharging their responsibilities as required by the law, however the minister did not on this issue to the Mps. He did not also address in his speech the relationship between his Ministry and the Auditor General who is supposed to audit the financial activities of the government;

16. He has to report on the programs and projects financed by Internal NGOs, UN entities and friendly foreign countries in the year 2003, 2004 & 2005;

17. The Minister refused to address in his speech authorized and unauthorized revenues collected, but not reported in previous year’s budget document.

3. On the basis of the above comments, I believe the Minister was not fair to the newly elected MPS in delivering such a scanty SPEECH, which in my opinion did not explain sincerely the responsibilities the Minister is wielding on behalf of the Nation. It is recommended therefore that the Minister addresses issues raised in this article and any other items omitted from this intervention, so as to demonstrate that the information contained in the budget document is fair, firm and without cosmetic make-ups. The Minister should have given assurances to MPS that his Ministry will ascertain that all public funds will be managed in accordance with laws of the country and in an efficient, effective and economical manner.

4. Further interventions will be made as and when budget document is released and made available to us, if allah so wishes.

.By: Mr. Ahmed M.Gedi (sanjab),

Secretary General, Sld Justice & Welfare Party(.U.C.I.D

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